The Customs and Considerations Needed to Invest In Argentina
If you are interested in investing in Argentina, there is something you should know off right off the bat. Argentina is a country that is rich in many ways, but also is relatively unpredictable. People can and do fare well and succeed in the country often, but the reality is that it really requires a certain personality and resolve to make that happen.
In order for investors to succeed and enjoy working here, resiliency is necessary. Laws can change quickly, and challenges arise daily. While in past times—about a century ago—Argentina was one of the world’s greatest economic powers, today it is still a Third World country and that fact remains. It is one with much promise, however, and that is to be kept in mind with the kinks along the way. Inconveniences and annoyances include situations like extensive and at times obtrusive bureaucratic red tape and the accompanying difficulties of navigating that. There also is the guarantee of encountering corruption in some form, whether small and unimportant or grandiose and institutionalized, that can often test an individual’s morals and character about what is right and wrong when it comes to conducting business. Doing business in Argentina, a country that ranked 107 out of 174 on the Corruption Perceptions Index 2014, requires a lot of seeing or analyzing gray areas. Beyond that there are infrastructure challenges associated with starting out in the country, from how to get something installed in an office to moments in the heat of summer when the power switches off across the city.
It is imperative to be relationship-oriented in Argentina, too. The family is the powerful nucleus of life in Argentina and friendships are considered and maintained with a similar importance. Business is conducted in a way that mirrors much of this, too. People are always focused on getting to know personally the individuals with whom they might work and do business, and once that relationships is established it is a close one in which people share many aspects and details of their lives and share many long meals. The concept of public versus private life as many in the United States are accustomed to is different—even nonexistent—in Argentina. To really understand the country and become immersed in it, this is necessary.
For those looking for quick turnarounds on investment, this is not the time or place. For those who are willing to invest and wait longer, or see the potential that many do, Argentina is a place to pay attention to. (Everyone really is always rooting for Argentina, one of the great powers of Latin and South America.)
Despite every administration seeming to have its own polar opposite idea of what is best for the country’s economy and propagating that, Argentina is a country that overall is open, welcoming, and wanting outside investment.
there are many important and likely profitable investment opportunities, particularly in the always-booming agricultural fields like soy and cattle. There also are opportunities with real estate.
It is not an uncommon tale for foreign investors to see opportunity in Argentina and invest in a company only to learn some time down the line that the company has failed to pay its taxes for the past couple years or hasn’t been keeping its books correctly.
There is opportunity to make sizable money in spite of and even because of that economic reality, but it has to be handled judiciously, such as by taking advantage of bonds. When the investment is structured correctly, it is possible to avoid paying double taxes.
One of the only industries still protected from foreign investment in Argentina is broadcasting, though even that has been amended to be friendlier to U.S. investments. While red tape is extensive in Argentina—where isn’t it though, after all—the country is open and welcoming to foreign investments and money flowing into the country.